Colorado oil and gas panel approves 500-foot oil well buffer

Setback can be altered by the property owner or a variance by the state commission.

Feb. 11, 2013

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As of Aug. 1, oil and gas wells and their related machinery cannot be drilled or placed within 500 feet of buildings statewide without a variance or waiver granted by the state or nearby landowners.

Drilling oil wells within 1,000 feet of a school or hospital will also be barred without a special hearing before the Colorado Oil and Gas Conservation Commission.

That commission on Monday voted 8-1 in favor of a new rule requiring a statewide 500-foot buffer, called a “setback,” between buildings and oil wells.

The buffer was increased to 500 feet from 150 feet in rural areas and 350 feet in urban areas to address public health and safety concerns.

There are loopholes, however: Drillers can get nearby property owners to sign a waiver allowing them to drill within the buffer zone, or, if a company can’t get landowners to sign the waiver, the COGCC can grant a variance.

Despite the loopholes, the oil and gas industry’s trade group, the Colorado Oil and Gas Association, criticized the COGCC’s decision, saying the new setback will interfere with land uses because it provides little flexibility for landowners.

“The current contentious dialogue about oil and gas development exposes a great disconnect between our reliance on oil and gas resources and our willingness to support its production,” COGA President Tisha Schuller said.

Yet industry representatives on the commission voted for the measure in part because of the unanswered questions about how energy development affects public health, something the state plans to investigate with a three-year study conducted by Colorado State University, which will look into how energy development affects air quality on the Front Range.

“What we don’t know are the health impacts” of oil and gas development, said Commissioner DeAnn Craig, a petroleum engineer at the Colorado School of Mines. “There is no conclusive evidence what the health impacts are. It was a tough rule for me to finally decide to support.”

“Certainly, we’re not sure yet about the public health impacts, but if we’re doing something that heads us in the right direction, at the end of the day, I will support the rule,” said Commissioner John Benton, general manager of Black Hills Exploration and Production. “What finally helps me get there is that there is a variance process.”

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The only commissioner to vote against the new setback was Tommy Holton, mayor of Fort Lupton.

He said he objects to the new setback distance because it is arbitrary and unsupported by scientific evidence.

“We need to base this in fact, not just because we can,” Holton said.

The decision “seems like a reasonable balance,” said Scott Hall, CEO of Black Diamond Minerals, which owns Prospect Energy, the lone oil and gas developer operating within city limits. Hall said he was pleased the COGCC allowed an exception to the setbacks in cases where there is an existing agreement or if an existing well pad was encroached upon.

“This is the case in the Fort Collins Field, where urban development encroached upon portions of an existing oil field and well pads,” Hall said. “People purchased homes knowing there was an oil and field in the neighborhood.”

Hall said there will still be added mitigation measures to ensure the health, safety and welfare of nearby homeowners.

Gary Wockner of Save the Poudre and Clean Water Action in Fort Collins said Monday a 2,000-foot-setback would have more effectively protected public health.

“The governor’s commission failed to protect the public, private property and the environment, and now it’s up to the Legislature to see if they can get the job done,” Wockner said.

But Senate President John Morse, D-Colorado Springs, gave ambiguous answers Monday about whether the state Legislature will take action on oil and gas development this year.

“I won’t be surprised if we do,” he said. “I won’t be surprised if we don’t.”

If fracking legislation is introduced, Morse said he expects it would be geared toward study of the practice’s impacts on air and water quality and public health to inform future policy decisions.